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The Middle East peace process is entering a critical period that requires "courageous" steps by Israelis and Palestinians to save the two-State solution, a senior United Nations envoy told the Security Council today, warning that the consequences of inaction could be dire for everyone.

"No international effort alone is sufficient for progress absent the requisite will from the parties themselves," said Robert Serry, the Special Coordinator for the Middle East Peace Process. "If they want to provide themselves and others with the opportunity to get on track in the period ahead, then now is not the time for actions that further undermine mutual trust."

In his remarks at the Council's open debate on the Middle East, Mr. Serry noted that today's meeting took place against the backdrop of ongoing events in the region that could affect the peace process itself, including yesterday's elections in Israel, today's polls in Jordan, and the start of United States President Barack Obama's second term.

"This is not a time to be idle," he state. "We are entering a critical period ahead, in which concerted action will be vital if we are to salvage the two-State solution."

Direct negotiations between the Israelis and the Palestinians have yet to resume since talks stalled in September 2010, after Israel refused to extend its freeze on settlement activity in the occupied Palestinian territory.

There has been a "dramatic" increase in Israeli settlement announcements after the General Assembly accorded Palestine non-member observer State status in the UN in November, Mr. Serry reported, as well as the withholding and redirection by Israel of tax revenues it collects on behalf of the Palestinian Authority.

"I urge both sides to abstain from actions that will make efforts to resume meaningful negotiations even harder in the critical period ahead and I call on Israel to restore the timely, predictable and transparent transfers of tax and customs revenues without further delay," he said.

He also cited "worrying" events on the ground, including continued settlement construction and increased violence, including clashes between Israeli settlers and Palestinians in the West Bank, increased Israeli operations in the area and Palestinian attacks on Israeli security forces there. In Gaza, the calm that was brokered by Egypt in November has largely held, but remains tenuous.

"Israeli and Palestinian leaders have stated, like us, that they are convinced the two-State solution is the only path toward a durable peace. But they should realize that absent serious engagement, the peace process will remain on life-support and stability on the ground will be put at risk even further," said Mr. Serry. "The consequences for inaction could be dire for everyone.

"Therefore, the parties must not only remain open to new initiatives to overcome the current impasse, but they must also demonstrate their seriousness. If Israel is serious about the two-State solution it must recognize the negative impact of continued settlement construction. Palestinian seriousness could be demonstrated by pausing further action in the international arena while talks begin," he stated.

The envoy acknowledged that none of the steps required by both sides to move the process forward are easy. "But we cannot afford another year without courageous action undertaken for the purpose of achieving a two-State solution.